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Published on March 7, 2008

Major local newspapers such as The Daily News, Krungthep Thurakit and Khao Sod have different opinions on the predicted efficiency of the tax package. Daily News, for instance, thinks the first dose of medicine is too small. Krungthep Thurakit thinks the package will be useless without political stability, while Khao Sod questions who will really benefit from the package. Khao Sod's "13th Column" headline begs the question, "Who benefits from tax cuts?"

Finance Minister Surapong Suebwonglee aims to boost economic growth by increasing tax allowances on long-term equity fund investments and life insurance, and by cutting the property tax and the corporate income tax for small- and medium-sized businesses.

However, Khao Sod questioned why farmers and low-income earners were left out of the package because these groups of people are not likely to have sufficient disposable income to invest in long-term funds or take out insurance policies.

Daily News' editorial piece said the first batch of tax incentives might be too small to have a real effect.

The Cabinet approved the three tax measures to boost the economy by focusing on three groups of tax payers: personal income tax payers, corporate tax payers, and taxes collected from companies on the stock exchange.

The paper said, "The three measures are the first dose of medicine to help revive the economy. Even though the government will lose tax income of Bt42 billion a year, some may think the first dose of pills is not strong enough because the beneficiaries will only be salary men and small- and medium-sized companies.

The paper expected that the tax cuts would take at least 6 months or one year to have an effect, but even this depends on outside factors such as the subprime crisis in the United States, oil prices and the price of domestic products. After the first dose of pills, the paper expected the second dose to stimulate the economy soon after.

Krungthep Thurakit, however, argued that the tax package would not work if the government fails to win political confidence.

Tax measures might - to a certain extent - improve investor confidence. But the government should do more because that confidence partly depends on outside factors such as the overall world economic situation and rising oil prices.

The government aimed to boost confidence by promoting domestic consumption via tax cuts. But the political situation is also a major factor that might undermine confidence.

Krungthep Thurakit said, "We saw that over the past month the government has made certain decisions that could erode political confidence. For instance, the reshuffle of senior officials at major agencies led to fears over possible conflicts.

We think that the government has a good chance to revive confidence. But if it still behaves suspiciously, the "grand sale" measures will not revive confidence or boost the economy if the political uncertainty still lingers.

Regarding the proposed legal casino project, Matichon questioned whether the project would be part of Thailand's strategy to develop the country's tourism industry. The idea to set up casinos in Thailand has been dusted off every time we have a new government. The paper urged the government to carefully think of the potential benefits and losses from the project by conducting a study and a public referendum.

"The government should consider what we want to sell in the next 10 to 20 years: natural resources or culture. Or whatever we can get, such as gambling. If we take a longer perspective, we may have a clear answer.

Compiled by Jeerawat Na Thalang.